The Securities and Exchange Commission (SEC) voted to approve a new standard for audit confirmations from the Public Company Accounting Oversight Board (PCAOB) that updates a standard first adopted in 2003, Accounting Today reported.

The new standard strengthens and modernizes the requirements for the auditor’s use of confirmation by describing principles-based requirements that apply to all methods of confirmation, including paper-based and electronic means of communications. The new standard will also integrate better with the PCAOB's risk assessment standards.

“We thank our SEC colleagues for their review and approval of the PCAOB’s new standard on the auditor’s use of confirmation," said PCAOB Chair Erica Y. Williams in a statement. "This new standard will help protect investors, as audit procedures that involve the use of confirmation are part of nearly every audit, and confirmation can be a vital tool to help auditors detect fraud. The new standard, which replaces a standard that had not been significantly updated in twenty years, is also a big step forward as the Board continues to execute its strategic goal of modernizing PCAOB standards.”

The new standard will take effect for audits of financial statements for fiscal years ending on or after June 15, 2025.